Got whiplash? US and global indexes jumped on Monday, responding to news of a $1trillion European loan package to staunch their debt crisis. The rally reinstated the gains erased by a panicked sell-off driven by concerns that Greece’s debt crisis would infect other markets.
While shopping this weekend, I overhead the store staff arguing loudly in a foreign language. The clerk explained that they were discussing the stock market. “Recovery is supposed to go up,” she said, forming her arm into a line graph to illustrate. “How can you recover like this?” I told her that it was probably just panic and stocks will bounce back after people stop freaking out. There will be ups and downs along the way but you can ride them out if you’re in it for the long term. She shook her head and packed my liquor into my bag.